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ASEAN STOCK WATCH Asean Affairs   8 May 2012

ASEAN Finance News

By Shayne Heffernan Ph.D.
 

ASEAN Markets will rebound today after a better overnight performance in the USA, Most U.S. stocks rose, following the biggest weekly decline in 2012, as banks rallied and investors weighed Francois Hollande’s election as France’s president and Greek voters flocking to anti-bailout parties.

About six stocks rose for every five that fell on U.S. exchanges at 4 p.m. New York time. The S&P 500 rose less than 0.1 percent to 1,369.64. The benchmark measure for U.S. equities fell 2.4 percent last week.


Singapore

Best Buys in Singapore are the stock over sold yesterday. CapitaLand ended down 5.4% at S$2.78, trading ex-dividend. Hongkong Land Holdings fell 5.0% to US$5.91 and CapitaMalls Asia lost 3.1% to S$1.43.

Private equity group Blackstone Group has made its first acquisition in Singapore, buying the StarHub Green project from Germany's SEB Asset Management for S$215 million ($173 million).

Blackstone bought the 400,000-square-foot business park as part of an opportunity real estate fund, according to a source familiar with the deal. SEB and Blackstone agreed to the terms of the deal last week, the source said.

SEB, which held the business park in an open-ended property fund, was facing redemptions and opted to liquidate the asset, the source said. Singaporean mobile phone and television operator StarHub, majority-owned by sovereign wealth fund Temasek Holdings, is the anchor tenant in the building.

The transaction comes as European financial institutions seek to raise capital through asset sales, with French banks such as BNP Paribas, Societe Generale and Credit Agricole all offloading portfolios of loans in a bid to deleverage.

Thailand

Central Group a Strong Buy

Thailand's Central Group has made its maiden foray into Singapore's already bustling retail scene, setting up two Manchester United merchandise shops.

This could be the start of more inroads into the local retail industry by the group, explained Central Group executive director Pichai Chirathivat.

He told The Straits Times: 'We would like to bring in our own house brands. We would like to be careful first, maybe open one or two brands first. Then you know whether there's chemistry and after that you can expand fast.'

Pichai was in town recently to attend the launch of Maybank Singapore's Manchester United Visa card.

He is the chief executive of Central Marketing Group (CMG), the marketing and trading arm of the Central Group of Companies - one of South-east Asia's biggest retail and property conglomerates.

The first outlet began business at Marina Bay Sands in December last year, while the second outlet opened its doors at Citylink Mall in March this year. Both were started at a cost of some US$500,000 (S$628,000).

Pichai explained that the first shop was targeted mainly at the tourist dollar, while the second was aimed at the local shoppers.

CMG has a license from the English football club to design and manufacture their own Manchester United merchandise to cater to Asian sizes and tastes.

Singaporeans who frequent Bangkok and Thailand will be familiar with the Central Group. Apart from running department stores all over Thailand, the group is also a prominent player in the country's real estate, hotel and restaurant scene.

The franchises run by the group in Thailand include Watsons, Office Depot and Marks and Spencer. It is also the sole agent or authorized distributor in Thailand for consumer brands such as Clarins, Casio, FCUK and Samsonite.

Asked about his group's expansion plans here, he said: “The retail scene is already very competitive, as Singapore is the land of shopping. But there is some room for the middle-end products and Thai local brands are well-suited to Singaporean tastes.”

He added that the group was unlikely to consider setting up a department store here like the ones they have in Thailand, as there were already “so many players here”.

But he is bullish on his strategy of bringing in brands, starting with Manchester United merchandise.

Pichai said: “We are experts on retail. We are open-minded, are adaptable and understand local people.”

Hong Kong

Stocks in Hong Kong took a beating yesterday but should gain ground today.

Excluding sessions with turnover bumped up by block placements, total bourse turnover neared the highest in slightly over a month. Losses on Monday took the Hang Seng Index to the lowest close since April 12.

* CNOOC Ltd and PetroChina Co Ltd slumped 4.2 and 3.4 percent, respectively, hit by sliding oil prices after the French and Greek elections raised concerns about the euro zone's austerity measures and reignited fears of falling energy demand. Fuel prices in the mainland could be cut as early as this week due to the drop in global oil prices, the official Shanghai Securities News reported on Monday. Since Friday, US crude has lost more than 6 percent, while Brent has dropped over 4 percent.

* Chinese Internet giant Tencent Holdings lost 4.9 percent, further slipping from an all-time high recorded last Thursday and before the Facebook initial public offering pricing disappointed investors by being set at the midpoint of an indicative range. Tencent, which had risen partly due to spillover optimism about the Facebook IPO, has shed 6.5 percent in the last two sessions since, but is still up 48 percent on the year.

China

Rising inflation last year had prompted Chinese policymakers to sharply reduce credit supply, especially to private borrowers, throwing the real estate sector into disarray and cooling economic growth.

The government has eased economic policies since in a program of "fine-tuning" which has seen it cut 100 basis points from the required reserve ratios of banks to support credit growth since autumn, while cutting business red tape and taxes.

An earlier purchasing managers survey indicated that input prices are rising, but increased buying by factories primarily reflects restocking, with domestic demand still tepid.

Overall, the PMI surveys also pointed to an uptick in the economy after a trough in the first quarter. But both the official PMI and an independent survey published by HSBC showed a continuing discrepancy between growth enjoyed by larger firms and the difficulties of smaller firms struggling to get credit.

Continued difficulty in getting loans may have contributed to a softening in fixed asset investment, which analysts expected to have slowed to 20.5 percent growth on year in April, down from 20.9 percent in March.

Fixed asset investment has underpinned the economy as export growth has wilted, though government action to crimp the speculative real estate bubble it has fuelled is beginning to bite.

Retail sales, also due on Friday, are expected to be steady year-on-year from March's 15.2 percent level. Economists point to urban and rural per capita incomes rising faster than GDP so far this year as offering key support to consumption growth as inflation eases.


Tokyo dived 2.78 percent, or 261.11 points, to 9,119.14, Sydney fell 2.16 percent, or 94.7 points, to 4,301.3, Singapore closed down 2.19 percent, or 65.64 points, at 2,924.95 and Seoul shed 1.64 percent, or 32.71 points, to 1,956.44.

Hong Kong slumped 2.61 percent, or 549.35 points, to 20,536.65 but Shanghai was almost unchanged, edging down 0.07 points to 2,451.95.

Kuala Lumpur ended down 6.17 points, or 0.39 percent, at 1,584.87.

Plantation giant Sime Darby lost 0.2 percent to 9.77 ringgit, while budget carrier AirAsia shed 2.8 percent to 3.54 ringgit.

– Jakarta fell 1.37 percent, by 57.82 points, to 4,158.86.

Car maker Astra fell 1.7 percent to 71,500 rupiah, Bank Rakyat slid 0.8 percent to 6,500 rupiah and cement manufacturer Indocement decreased 1.6 percent to 18,550 rupiah.

– Taipei slumped 2.11 percent, or 162.87 points, to 7,538.08.

HTC fell 4.35 percent to Tw$450.0 while TSMC declined 2.28 percent to Tw$85.6.

– Manila closed 1.28 percent, or 68.02 points, at 5,229.53.

Megaworld Corp. fell 1.38 percent to 2.14 pesos while Metropolitan Bank and Trust slipped 2.17 percent to 90 pesos.

– Wellington closed 0.27 percent, or 9.65 points, lower at 3,540.13.

Contact Energy fell 0.83 percent to NZ$4.79, Fletcher Building shed 0.80 percent to NZ$6.23 and Telecom gained 1.97 percent to NZ$2.59.

– Bangkok was closed for a public holiday.

Shayne Heffernan Ph.D.  

Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
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